The Insolvency Service have held a long-established view that creditors are classed as such at the point of entry into an insolvency process. This view was brought into question and challenged in the cases of Pindar and Toogood where in essence the judges (after considering the definition of secured creditor in s248 of the Insolvency … Continue Reading
Since the cases of Avanti and UKCloud we have seen more arguments around the classification of a charge – is a typical floating charge asset actually subject to a fixed charge? Is a fixed charge really floating? Much depends on the control the charge holder asserts, but we have seen some novel claims. The position … Continue Reading
As insolvency practitioners (IPs) it is not unusual to have to consider the terms of a particular contract, whether that is enforcing the terms of that for the insolvent entity or considering the rights of the third party as against the company, and in some cases, it is necessary for IPs to enter into a … Continue Reading
We have seen an increasing number of contested restructuring plans (RPs) over the last quarter. With a notable shift of RPs into the litigation arena, and some gentle push back from the judiciary about timetabling and use of court time the judiciary has published a draft practice statement for consultation outlining new case management requirements … Continue Reading
Much will depend on the specifics of a company’s financial position, but there are some themes from the OutsideClinic and Enzen judgments that are helpful – and arguably so even beyond the context of RPs for a company’s managing its relationship with HMRC. Is HMRC in or out of the money? In OutsideClinic HMRC had … Continue Reading
The Outside Clinic restructuring plan (RP) was sanctioned last week with HMRC voting in favour of it. In a similar vein to Enzen (see our earlier blog) HMRC initially indicated that it was not inclined to support the plan, but, after negotiating a higher return following the convening hearing, it voted in favour of it. A … Continue Reading
You may have read our previous blog about the Outside Clinic Restructuring Plan (RP) which asked whether 5p was enough to cram down HMRC and thought, well surely if that’s not enough, 10p would work? The Enzen Restructuring Plans (RPs) that were sanctioned this week also sought to compromise HMRC’s secondary preferential debt proposing a … Continue Reading
For those in the mid-market who have watched developments in restructuring plans (RP) move from a potential rescue tool, to something prohibitively expensive, the OutsideClinic RP might be one to watch. Not least because the RP seeks to cram down HMRC. Following RPs proposed by Naysmyth and the Great Annual Savings Company (which were unsuccessful … Continue Reading
Although the case of Anthony John Wright and Alastair Rex Massey vs. Scottish Court of Session [2024] CSOH 105 is (as the name suggests) a Scottish decision, there are several takeaways from the case relating to the content of progress reports, which could usefully be applied and followed by English practitioners when making their own application. … Continue Reading
Using the same or similar name of a company that is in insolvent liquidation is prohibited by s 216 of the Insolvency Act 1986 (IA). A director who acts in breach of s216 by being a director of, or being involved in the promotion, formation or management of a company that is using a prohibited … Continue Reading
Throughout his 2024 campaign, President Donald Trump vowed that if re-elected, he would address unfair trade practices, rebalance trade relationships, and fund other economic proposals through new and expanded tariffs. With his return to the White House, the world is grappling with a complex web of international trade risks and potential opportunities in 2025. President … Continue Reading
What can we expect in R&I in 2025? Well that’s always difficult to know for certain but our predictions are based on what we saw in 2024, and how we expect some of these to play out in 2025. And let’s see where we are at the end of the year because there were a … Continue Reading
It is usual for administrators to ask for an administration to be extended by 12 months – but we have seen the courts agree to longer periods. For example, certain of the Lehman group company administrations were extended by periods of four and six years – having previously been extended by eight. In the more … Continue Reading
The date that a winding up petition is presented has consequences – consequences for the company subject to the petition, its directors, the petitioning creditor and it is also important in the context of a subsequent liquidation where the date is relevant to claims which a liquidator can bring. Although seemingly a simple question, the … Continue Reading
Following the decisions in Fore Fitness and Active Wear – where the court examined the validity of decisions made by a sole director of a company that operated wholly or partly under the Model Articles[1]– the position was not entirely settled. In the context of administration appointments where the validity of an appointment rests on … Continue Reading
In the case of JDK Construction Limited the Court of Appeal had to consider whether an earlier decision by a High Court judge that liquidators had been validly appointed was correct. The answer to that question turned on whether the resolutions that the company had passed to place the company into voluntary liquidation were valid … Continue Reading
It seems like s248 of the Insolvency Act 1986 (“Act”) is flavour of the month with the judiciary at the moment, with two recent cases analysing this in the context of administration extensions (read our previous blogs here and here ) and now a further decision considering this in the context of converting an administration … Continue Reading
There is a tension between UK insolvency and pensions laws. Put simply, this is because insolvency laws look to protect all of the company’s creditors, but pension laws seek to protect the interests of the pension creditors alone. When new offences and criminal sanctions were introduced in 2021 enabling TPR to issue fines of up … Continue Reading
As practitioners we pour over notices of intention to appoint (NOIA) and notices of appointment of administrators (NOA) to make sure every detail is accurate. Why? Because no one wants to risk an invalid appointment because there was a minor mistake or error that was overlooked. Understandably errors occur, particularly when the appointment of administrators … Continue Reading
For those that are that way inclined (which includes us at #SPBRestructuring!), the 500 plus page Wright v Chappell judgment which sets out the BHS wrongful trading claim against its former directors makes for an interesting read. It paints a colourful picture of the downfall of the BHS group, from the point that it was … Continue Reading
No, it isn’t. We now have two cases where the Court has decided that the consent of paid secured creditors is not required when extending an administration under para. 78 of Schedule B1 of the Insolvency Act 1986 (the “Act”). In Boughey & Anor v Toogood International Transport and Agricultural Services Ltd [2024] EWHC 1425 … Continue Reading
This question was considered in the recent case of Pindar where the judge concluded that an administration had been validly extended where the consent of one of the secured creditors (who had been paid) was not obtained. Many insolvency practitioners are likely to welcome this decision with open arms given that it can be problematic … Continue Reading
The UK Financial Conduct Authority (FCA has issued a consultation about proposed changes to its Guidance for Insolvency Practitioners. The aim is to clarify existing guidance and provide more information to insolvency practitioners (IPs) on how to deal with regulated firms. The proposed amendments (shown as track changes in this document) intend to update the … Continue Reading
Last year we discussed the impact of funding insolvency litigation following the Supreme Court decision in PACCAR where the court found that litigation funding agreements (LFAs) were damaged based agreements. This meant that unless LFAs complied with the Damages Based Agreements Regulations 2013 (DBA Regulations), they were unenforceable. Although concluding that the outcome of the … Continue Reading
